VoIP and its Impact on
Competition in the
Telecommunications
Sector
Monika Podpłońska
V-ce Director of Retail Electronic Communications
Market Department/UKE
Geneva,15 - 16th January, 2007
Regulatory activities in EU
Lack of concrete definitions of VoIP services in
EU
IP Telephony service is analysed case by case
for each service (public telephony service)
European regulators conduct public
consultations in terms of regulatory remedies
The classification of VoIP services shows
different regulatory approaches (1-3)
Country
Regulator
Classification of VoIP
Austria
RTR
Two classifications: Class A are VoIP services that enable access to the PSTN and
are regulated as telephony services; Class B are unregulated Internet-only VoIP
services
Czech Republic
CTU
VoIP is not considered as a public telephone service, but as a data-transmission
service – no regulatory initiative has yet been undertaken
Denmark
ITST
VoIP services are treated in the same way as other voice services. The legislation
claims to be technology neutral
France
ARCEP
Two classifications: voice over broadband (VoB), or managed IP telephony,
services are considered substitutes for PSTN services and therefore subject to
regulation; voice over the Internet (VoI) services are software based, with restricted
availability, and so are not regulated
The classification of VoIP services shows
different regulatory approaches (2)
Country
Regulator
Classification of VoIP
Germany
BNetzA
There is a statutory requirement to technological neutrality: rights and
obligations depend upon the services offered. VoIP services that offer access to
the PSTN are, therefore, classed as telephony services
Hungary
NHH
Any VoIP service has to be registered as a telephony service. VoIP providers
must inform customers of reliability and quality issues
Italy
AGCOM
No formal legislation in place. Consultation showed three types of VoIP service
in the Italian market that are likely to act as basis for future categorisation: PSTN
equivalent PATS VoIP; PATS VoIP nomadic and innovative services; non-PATS
ECS VoIP
Netherlands
OPTA
No explicit classification of VoIP, although some broadband voice services have
been found to be within the defined market for ‘access to the public telephony
network at fixed locations’. OPTA has decided that regulation of KPN’s retail
VoIP tariffs is justified in order to protect operators using unbundled loops
The classification of VoIP services shows different
regulatory approaches (3)
Country
Regulator
Classification of VoIP
Norway
NPT
Three types of VoIP service: 1: VoIP offerings that are not any-to-any enabled, i.e.
have no interconnection to traditional telephony networks; 2: VoIP offerings that
are partially any-to-any enabled (one-way interconnection only); 3: VoIP offerings
that are fully any-to-any enabled. Number 3 is classified as PATS if publicly
available. NPT has still to decide whether types 1 and 2 are subject to existing
legislation
Poland
UKE
VoIP is not currently classified or regulated but at least some services are likely to
be classed as PATS in forthcoming legislation
Russia
Minsvyaz
VoIP is currently classified as a data-transmission service
Spain
CMT
All VoIP services are classified as ECS
Sweden
PTS
VoIP services are considered as telephony services under certain conditions and
regulated accordingly
UK
Ofcom
The regulator recognizes that the application of existing legislation to VoIP
services is unclear and is currently reviewing the situation after a public
consultation. It has proposed a flexible definition of PATS and has thus far
favoured intervention on specific practical issues
Key regulatory challenges (1)
 to ensure that consumers are aware of both the
benefits and limitations of the particular VoIP services
like :
 lack of number portability services
 lack of access to directory services
 lack of calls to emergency services
Key regulatory challenges (2)
 to ensure the most important factors for VoIP
providers:
 allocation of new numbering ranges for VoIP services
 ability to port existing numbers
 interconnection issues
Regulators' stances on numbering ranges for VoIP
in major European countries (Source: Analysys
Research, 2006) (1)
Country
Separate numbering range
for VoIP
Geographic numbers
for VoIP
Use of geographic numbers for
nomadic services
Austria
Yes
Yes
No
Czech
Republic
Yes
No
N/a
Denmark
Yes
No
N/a
France
Yes
Yes
Under review
Germany
Yes
Yes
No
Hungary
No
Yes
No
Regulators' stances on numbering ranges for VoIP
in major European countries (Source: Analysys
Research, 2006) (2)
Country
Separate numbering range
for VoIP
Geographic numbers for
VoIP
Use of geographic numbers for nomadic
services
Italy
No
Yes
No (a new range is proposed for these
services)
Netherla
nds
Yes
Yes
No
Norway
Yes
Yes
No
Poland
Open to operators only
No
N/a
Russia
No
No
N/a
Spain
Yes
Yes
No
Sweden
Yes
Yes
No
UK
Yes
Yes
Yes
Regulatory status of VoIP in some EU countries in
2006
11 countries with separate numbering
range for VoiP
Regualtions mostly in terms of retail
relevant markets for calls 3 – 6
Additional separate market for VoiP
services based on broadband access in
Germany
VoiP service is planned to be analysed
together with naked DSL service in UK
Impact of VoIP services on competition in
telecoms markets
Retail fixed-line VoIP services already pose a threat to
incumbents’ fixed telephony revenues
Substitution of fixed telephony
Growing number of users - forecasts
New opportunities created for VoIP over BWA
Substitution of fixed telephony
1999
VoIP calls (mln
minut)
2000
2001
2002
2003
2004
2005
2006*
1 655
5 954
10 147
18 045
24 519
30 121
52 768
75 746
PSTN calls (mln
minut)
108 000
132 027
146 095
155 165
166 615
199 000
219 232
237 254
Total (mln
minut)
109 655
137 981
156 242
173 210
191 134
229 121
272 000
313 000
1,5%
4,3%
6,5%
10,4%
12,8%
13,1%
19,4%
24,2%
VoIP calls share
Source: TeleGeography Inc. 2006, PriMetrica Inc.
Revenue from international calls
mld USD
62
60
USD
0,7
Revenue (in mld USD)
0,63
Price for a minute (USD)
0,58
0,6
58
0,51
56
0,5
0,44
0,4
0,39
54
0,35
0,32
52
0,3
50
0,2
48
0,1
46
44
0
1998
1999
2000
2001
2002
2003
2004
Prices for VoIP calls (to mobile numbers) –
Poland
1,6
1,4
1,2
1,0
0,8
0,6
0,4
0,2
national mobile
France mobile
Germany mobile
06
12
.
05
10
.
05
06
.
12
.
04
0,0
UK mobile
Prices of VoIP calls (to fixed numbers) –
Poland
1,2
1
0,8
0,6
0,4
0,2
0
gru-01
France fixed
gru-02
gru-03
UK fixed
12.04
national fixed
06.05
10.05
Germany fixed
12.06
USA
Cost of VoIP services in Poland
 Most of providers do not charge their clients with
one off fee and monthly subscriber’s fee
 Certain providers assign free off charge PSTN
number to their subscribers
 Polish providers keep similar level of prices for
calls to fixed network - average price is approx.
0,1 PLN ( less than 0,1 euro)
 Differences are bigger when it comes to provision
of calls to mobile networks – average price is
between 0,61- 1,09 PLN (up to 0,25 euro)
Number of users – forecast
(broadbrandtrends.com)
Subscribers (thousands)
180 000
160 000
140 000
120 000
100 000
80 000
60 000
40 000
20 000
0
2002
1 264
VoIP Optimistic
VoIP Intermidiate 1 264
1 264
VoIP Pessimistic
2003
4 977
4 977
4 977
2004
11 787
11 787
11 787
VoIP Optimistic
2005
23 820
21 552
17 398
2006
43 612
38 212
30 701
2007
66 162
57 451
46 320
2008
2009
2010
94 209 123 341 161 242
80 589 104 221 134 258
63 988 80 895 102 308
VoIP Intermidiate VoIP Pessimistic
Number of users – forecast
mln
300
18%
(IDATE)
16%
250
14%
200
12%
10%
150
8%
100
6%
4%
50
2%
0
0%
2005
VoIP users
2006
2007
2008
2009
2010
2011
Share of VoIP users in the number of all users of main lines
20 000
100
90
16 000
80
14 000
70
12 000
60
10 000
50
8 000
40
6 000
30
Residental customers [td]
4 000
Non - Residental customers [td]
2 000
20
10
0
0
2006
2007
2008
2008
2010
2011
2012
2013
2014
2015
Non - Residental customers (td)
Residental customers (td)
18 000
Number of users – forecast for
Poland
VOIP OVER BWA COULD BE AN ATTRACTIVE SERVICE FOR
NEW-ENTRANT OPERATORS
Bigger impact: New fixed operators, ISPs, WISPs and VoIP providers.
VoIP services will significantly enhance the business case for BWA
system deployment by these players.
Less impact: Mobile operators are expected to deploy cellular
technologies, rather than alternatives, and not to use BWA systems to
compete directly with fixed DSL/cable services for Internet access. New
competition from BWA service providers (e.g. WiMAX) is expected to
have a limited effect on mobile operators’ voice revenues.
Less impact: Incumbent fixed operators are expected to deploy fixed
broadband (e.g. DSL) solutions and only to consider the use of BWA for
rural areas. New competition from BWA service providers (e.g. WiMAX) is
expected to have limited effect on fixed voice revenues.
Thank you for your
attention
Monika Podplońska
V-ce Director of Retail
Telecommunications Market
Department/UKE
e-mail: M.Podplonska@uke.gov.pl
Telephone: +48225349231